South Ribble could empty its own bins due to soaring cost of privatisation

South Ribble Council could take over the running of its household refuse collection from an outside company for the first time in 30 years because of the soaring cost of the service.

By Brian Ellis
Tuesday, 12th April 2022, 3:45 pm

The authority spends £1.8m a year employing a private firm to do bin rounds to its 50,000-plus households.

But, with the current seven-year contract about to expire in June, council officials say the company - FCC Environment (UK) Ltd - needs a "significant" increase if it is to continue providing the service.

Councillors will be asked next week whether they want to extend the contract at a higher cost, or take refuse collection in-house, which would mean taking over the contracts of 54 staff who currently work on the bin wagons.

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Bin collections could be taken in-house due to soaring costs.

The matter is on the agenda at next Wednesday's full council meeting. And members will have only two options - either taking the service in-house or leaving it out-sourced.

The new contract on the table is for three years, with a further four-year option.

No figures have been revealed, although officers have hinted the increase is substantial enough to ask for a vote on bringing household collections back under the council's control after decades of privatisation.

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The cost of collecting South Ribble's bins is £1.8m a year - and rising.

The council's budget for waste for 2022/23, agreed in February, is set at £2,170,800, an increase of almost £300,000 on 2021/22.

Officers estimate that if the service is brought in-house then it would save around £178,500 this year. If the out-sourced contract was renewed it would be over-budget.

A report to go before the council next week puts the case starkly, saying the outside firm's "best and final price" is a significant uplift on the current costs due to rising overheads, mainly in staff and fuel costs.

It says that either a new contract is agreed by June 11, or the service will have to be operated by the council itself. That would mean transferring all staff across under TUPE regulations, bringing in specialist advisors to project manage the scheme and seeking contracts with suppliers including IT hardware and software to operate it.

The report says: "The council provides waste and recycling collection services to over 50,000 households. This is a significant and high-profile service delivered daily throughout the borough all ear round and includes garden waste collections.

"The council has outsourced waste and recycling collection services for around 30 years and to FCC since 2015. The waste contract is in the final months of a seven-year contract term and will expire on 10 June 2022.

"Other than the impact of the national shortage of HGV drivers, FCC’s contract performance has generally been good, performing well throughout the pandemic.

"Negotiations on a contract extension commenced with FCC in 2020. Given economic uncertainties, the council proposed a three plus four-year extension to the current contract, including a mid-term review and break clause after three years.

"A revised pricing proposal was submitted in December 2021. This indicated a significant annual cost increase reflecting further underlying economic risks and challenges in the current and forecasted financial climate.

"The price increase is comprised mainly of increases in driver pay rates, increases in National Insurance contributions, increase in fuel costs, and factors cost of the Real Living Wage to March 2022.

"Commercial discussions with FCC have continued following their pricing proposal in December 2021.”